I need some help on understanding the ramifications of walking away from a refinanced loan. I did some research and found some information and just want to verify with some of the experienced folks here in this forum.
Here goes my situation:
- Mortgage Upside Down - Almost $200K Underwater
- Current Value - $365K
- Current Loan Balance - $555K - 30Yr Fixed @ 6.625
- Property Location: Vacaville, California
- Lender: Homecomings Financial
- Loan Type: Refinanced (2007)
- P+I = $3,700.00
- Escrow/Impounded = $1,200.00 (PMI, Tax, & Insurance)
- Total Monthly Mortgage: $4,800.00
- Just One Loan no 2nd or HELOC
We have decided to walk away and will just rent for the next 5 - 7 years till the foreclosure records gets cleared from our credit report and just save the money while we are renting. So, effective next month we will not be paying anymore.
So, here are my initial questions and hopefully you guys have some answers.
1. Since, this is a refinanced loan which makes it recourse, how often do you think lenders go through the judicial proceedings instead of non-judicial so they can pursue the deficiency amount? I was told by a lawyer that if you’re a high wage earner and have some assets they will go after you.
2. What are the things we can do to protect those assets if in case they go through judicial proceedings?
3. How do we deal with the lender when they start calling? Since this is not hardship do I just avoid them or tell them I don’t really have any plans on paying my mortgage anymore? Will this actually even provoke them to pursue judicial proceedings?
4. Would hiring an attorney make more sense? If so, how much do you think will it cost me? What about those services from walkaway.com or mortgagedefaultlegalteam.com?
Appreciate all the input you can give.